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Does Medicare Have Cost-Sharing?


Medicare has cost-sharing that you’ll need to know about. In fact, there are a few out-of-pocket costs for which you’ll be responsible. But aside from premiums, what are they? We’ll break down what you need to know about coinsurance, copays, and deductibles.

Medicare Cost-Sharing: Copays Vs. Coinsurance

The terms copayment and coinsurance are very similar. But what’s the difference between the two, or is there any? You’re probably familiar with a copayment (or copay) being a dollar amount you pay as your share, out-of-pocket. You’ve paid these for prescription drugs or medical services.

Well, coinsurance works similarly to how copays do, but instead of a dollar amount, coinsurance is a percentage of the total cost. For example, if you owe 20% of a drug’s total cost with a Part D plan, your plan pays the rest. Some Part D plans involve tiers for different drugs.

Original Medicare doesn’t come with copays, but it comes with coinsurance. For example, Part B comes with coinsurance, which means every time you visit the doctor, you’re responsible for 20% of the cost for the services you receive. But, a Medigap policy helps to cover the additional 20%.

How to Do Medicare Deductibles Work

A deductible is an out-of-pocket amount beneficiaries must pay before the policy starts to pay. Part A has a deductible per benefit period, and Part B has a deductible that changes each year. Part D also has an annual deductible you must pay before benefits kick in. Unlike the deductibles for Original Medicare, the Part D deductible depends on the plan in which you’ve enrolled. This is because Part D plans are offered through private insurance companies.

Tip: If your doctor’s office or hospital ever asks you to pay the deductible upfront, tell them to bill Medicare. You should never pay any deductibles to a provider.

Medicare Advantage Out-Of-Pocket Costs

When you enroll in an Advantage plan, the carrier determines what the cost-sharing will be. So, instead of the 20% coinsurance, you have to pay under Medicare, it could be more.

The deductible, coinsurance, and copays you’ll need to pay to depend on the plan. You’ll have to pay these costs until you reach the plan’s annual out-of-pocket limit.

Thus, predicting your future healthcare costs is nearly impossible with an Advantage plan. The only certainty is that you won’t spend more than the maximum out-of-pocket amount.

Medigap Cost-Sharing Plans

Three Medigap plans involve cost-sharing. These plans are Plan K, Plan L, and Plan M. The cost-sharing helps keep the premiums for these plans lower.

FAQs

Do you have to pay a deductible with Medicare?
Yes. There’s a Part A deductible for each benefit period and a Part D deductible that changes annually.
Does Medicare have a copay for doctor visits?
No. There are no copays with Medicare, so your practitioners shouldn’t be asking you for a copay. There is, however, a coinsurance of 20% that you must pay directly to Medicare. A Medigap policy covers this amount.
Is there a Maximum Out of Pocket for Medicare?
There is no maximum out of pocket for Medicare. However, there is a maximum out of pocket on Medicare Advantage plans.

How to Get Help with Medicare Cost-Sharing

If you're interested in keeping your out-of-pocket costs low, a Medigap plan might be worth exploring. All Medigap plans cover the 20% coinsurance for Parts A and B.

Call the number above to reach our agents. They'll provide all the information you need to make the best decision for your health and budget. Another option is to fill out our online rate form. You'll get a comparison of premium quotes for plans in your area.

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Lindsay Engle

Lindsay Engle is the Medicare expert for MedicareFAQ. She has been working in the Medicare industry since 2017. She is featured in many publications as well as writes regularly for other expert columns regarding Medicare. You can also find her over on our Medicare Channel on YouTube as well as contributing to our Medicare Community on Facebook.

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